ActivTrades’ Market Analysts have prepared for LeapRate their daily commentary on traditional markets for July 30, 2019. See details below:
FOREX
On Tuesday the Pound hit the lowest level against the US Dollar in more than 2 years. Sterling weakness results from increased chances of a no deal Brexit, which is seen by the markets as the worst possible outcome for the ongoing process. Since Boris Johnson became prime minister the UK stance towards the negotiations became harder, demanding a new withdrawal deal; but the EU is refusing to renegotiate the existing agreement. The stand-off between the parts is leading to an increased likelihood of a chaotic exit from the EU on October the 31st, adding uncertainty about the future shape of the British economy and keeping the Pound under pressure.
Ricardo Evangelista – Senior Analyst, ActivTrades
EUROPEAN SHARES
European markets opened mostly in red territory on Tuesday despite rising Asian shares and U.S. Futures pointing to a positive open. Equity investors are awaiting developments in the U.S.- China trade talks, which are resuming today in Shanghai. In Europe, the FTSE-100 index is the only benchmark edging higher, as a looming no-deal Brexit keeps the Pound Sterling under pressure. Despite being opened to a renegotiation of the deal reached by Theresa May earlier in the year, Boris Johnson also said he would not meet any EU leaders until the backstop of the Irish border is removed from the agreement. He then confirmed he will get ready to exit the EU with or without a proper deal, a scenario investors really dislike as it casts a great deal of uncertainty over the future of the kingdom. The FTSE-100 index is trading towards a 1-year-high of 7,635.0pts after having cleared the 7,560.0pts zone recently. The next targets are set at 7,700.0pts and 7,730.0pts by extension if the negative pressure on the Sterling continues.
FTSE-100 index
Pierre Veyret– Technical analyst, ActivTrades
GOLD
Gold is trying to flex muscle, despite the strength of the greenback. European stock markets in red and tension over Brexit (with the pound collapsing further) are pushing some investors to bet on gold. But the main trigger still appears related to expectations of a dovish Fed in this week’s meeting. From a technical point of view, both silver and gold could be ready for further rallies in case of a dovish FOMC. A 0.25 basis points cut seems already priced in, so investors are now looking for a stronger signal such as a 0.50% cut, which appears not likely at this stage, or a 0.25% cut, with some reassurance about further rate cuts later this year, in order to support US economy.
Carlo Alberto De Casa – Chief Analyst, ActivTrades